Transform means, ‘ to change’.
Transaction means, ’exchange, settlement, negotiation ’ From these simple definitions it is easy to understand that they are indeed different. Should a person transform something then it is expected that they change it greatly. If a person carries out a transaction then it implies that a deal is done that has mutual benefit for those involved. These very basic definitions are the basis of two types of leadership that are described in contemporary leadership literature.
Indeed Daft (2005) describes leaders as transformational when they operate as change agents and induce people to; “transcend their personal interests for the good of the organization” (p 63)
James Mc.Gregor Burns (1978) describes Transactional leadership as, “a barter, an exchange of wants between leader and follower.” (p 63)
The definitions of transformational and transactional leadership support the basic dictionary definitions , however much greater analysis of the literature pertaining to these leadership types is necessary to fully comprehend what they mean and how they are reflected by leader behaviour. More in depth analysis will also reveal greater differences between them. This essay will compare and contrast contemporary perspectives about Transformational and Transactional leadership by describing attributes of both in detail and making comparisons between them.
TRANSACTIONAL LEADERSHIP
(Houghton and Yoho, pp 69) state; ‘Transactional leadership focuses on the creation of reward contingencies and exchange relationships resulting in a calculative compliance on the part of followers.’
Thus Transactional leadership is a style of leadership where the leader, being aware of what the follower wants or needs, barters with the follower so that the follower will provide what the leader wants.
In a factory situation an example would be when a person in a power position such as
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